So here's the deal. Hollywood studios have been increasing unhappy about the decline in DVD sales. One might paraphrase the Oscar-winning Network and say they are mad as heck, and can't take it anymore. In the first half of 2009, U.S. retail sales of DVDs dropped 13.5%, while DVD rentals rose by 8.3%. People are being non-committal with their televised entertainment, preferring to watch once and ship back rather than purchase for their permanent collection. The studios' solution? Delay their audience's gratification, making new releases available only for purchase for the first few weeks. People counting on seeing new flicks on Netflix (NFLX) or via Coinstar's (CSTR) Redbox service would just have to wait ... or buy the movie, which is what studios are hoping for.
Now, Redbox is putting up a fight, filing lawsuits against Universal, Warenr Brothers, and Fox studios, but Netflix appears to be taking a different back-scratching sort of approach. Netflix CEO has reportedly stated that if they are forced to accept late releases, they would expect to be able to purchase said DVDs at a discounted rate from the studios. In other words ... Netflix saves money, the studios potentially make more money, and the users ... have to wait to see new movies.
But all this begs the question ... who is really that desperate to own a movie these days? Those who really want to see a movie buck up and head to the theaters. Those who have seen and loved a movie might want to own it, but they are just as likely to download from iTunes than to buy the tangible good. Hollywood's move may backfire, coming off more as a threat and further alienating the movie-watching public. Meanwhile, as we wait for the newest releases to become available on our Netflix queues, we can enjoy some of the classics. Might I suggest Network?
Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.
But all this begs the question ... who is really that desperate to own a movie these days? Those who really want to see a movie buck up and head to the theaters. Those who have seen and loved a movie might want to own it, but they are just as likely to download from iTunes than to buy the tangible good. Hollywood's move may backfire, coming off more as a threat and further alienating the movie-watching public. Meanwhile, as we wait for the newest releases to become available on our Netflix queues, we can enjoy some of the classics. Might I suggest Network?
Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.
Why is gold marching higher? Ask the central bankers
Newspaper ad revenue of 28%, 8 quarters of double-digit drops
Closing Bell: Earnings working against stocks (BCRX, DELL, DHI, INTC, LEAP, PCS)
Reader Comments (Page 1 of 1)
11-11-2009 @ 9:23PM
Jake said...
Ah, yes, let's punish our consumer so that they'll buy more from us... (defies logic)
11-12-2009 @ 11:17AM
benjb53 said...
I AM DROPPING MY NETFLIX MEMBERSHIP!!!! WHAT A CROCK! I HAVE BEEN WAITING FOR WEEKS FOR A NEW MOVIE...NOT ACCEPTABLE!
11-12-2009 @ 2:42PM
Last Rung said...
I love the people who write these articles, they take what they and apply to the rest of the population.
You said: "Those who have seen and loved a movie might want to own it, but they are just as likely to download from iTunes than to buy the tangible good."
What? yes, dvd sales have slipped, but it still billions more than itunes. Who's numbers are so small, apple won't even reveal them! All these articles that are spelling doom and gloom for dvds, video stores, it's mostly wishful thinking.
show me some REAL numbers! NOT what you like to do and think everyone is doing it!